NEW DELHI: Services exports at around $618 billion are expected to outpace merchandise exports by FY30. Within services, information technology and IT-enabled services (ITeS) may take a backseat, according to a report.
Between 2018-19 and 2023-24, goods exports witnessed a compounded annual growth rate (CAGR) of 5.8 %, while services exports grew at 10.5 %.
“At this rate, by FY2030, services exports are expected to reach $618.21 billion, edging past merchandise exports, which are projected at $613.04 billion,” the report by Global Trade Research Initiative (GTRI) said.
Software and IT services, grouped under the broader category of ‘telecommunications, computer, and information services’ contributed $190.7 billion to India’s exports in 2023-24. This segment represents 56.2% of the total services exports, with about 80% of these delivered digitally. Other business services (OBS), covering areas such as legal, accounting, tax consultancy, management consulting and market research, generated $102.8 billion in exports in 2023-24, representing 33.2% of the total.
“Emerging technologies like generative AI, machine learning and the Internet of Things are expanding opportunities for Indian firms, driving innovation and global demand for Indian expertise,” GTRI founder Ajay Srivastava said.
Globally, OBS trade is more than twice the size of the IT sector, underscoring its potential. In 2023, global OBS trade stood at $1.8 trillion, accounting for 25.4% of world services exports, compared to $762 billion, or 10.7%, for software and IT.
The US accounts for 70% of India’s IT export revenue, making the sector vulnerable to policy shifts. “President elect Donald Trump’s criticism of outsourcing and restrictive H-1B visa policies underscore risks the sector faces,” Srivastava said, adding that diversification into new markets and focusing on high-value services like digital transformation and AI integration can help reduce dependency on the US and expand earnings.
“India should actively target services with high global trade volumes, but low domestic participation. Categories like transport, travel, maintenance & repair, insurance and financial services offer immense growth potential,” Srivastava said.
Source: The Financial Express
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